Unsecured rate will be reduced from 14% to 11% from the first week of January announces the president of the IESS

The rate of unsecured credits, granted by the IESS Bank (Biess), it will drop from 14% to 11% in the first week of January. This was announced by the Chairman of the IESS Board of Directors and Chairman of the Biess Board of Directors, Francisco Cepeda.

The senior IESS official, who has been in office since last October, explained that the idea of ​​this reduction in The rate is to be able to inject liquidity into the economy through the affiliates and thus be able to generate a greater economic reactivation. This, considering that the Unsecured is the “star product” of this bank, as it is 1% delinquent. The payment of this type of credit is deducted directly from the employee through the companies.

Additionally, he said, this measure could put downward pressure on the rates of the rest of the financial system, which would result in better credit conditions for all citizens. He considers that this drop makes the product very attractive since it is below the rates of credit cards for current consumption and short-term loans.

According to Biess data, members and retirees who access this type of credit have allocated resources mainly to health and debt payment. Between May 13, 2021 and October 31, 2021, a placement was registered of $ 1,495 million for a total of 1,179,060 operations. The goal for that period was $ 1,541 million, so compliance has been 96.98%.

The demand for unsecured credit has been increasing as it has progressed this year. Thus, according to the Biess data, in May 2021 $ 169.8 million were delivered in some 122,792 operations. Meanwhile, for October delivered reached 255.8 million, in 210,720 operations.

Of the total credits granted, it is known that 41.73% corresponds to health expenses. Thus, $ 623.9 million have been allocated to this issue, in 513,523 operations.

Additionally, the affiliates who opted for these credits allocated the resources to Debt payment at 37.27%, that is, about $ 557.2 million, in 460,916 operations. Resources have also been provided for education and the acquisition of equipment.

Meanwhile, the delivery of credits used for travel, tourism and payment of alimony is registered to a lesser extent.

Additionally, the Biess reported that the placement of unsecured officers between the 1 and on November 26 it was $ 237 million, in 190,006 operations.

Meanwhile, the Biess is also at a time to rethink its policies for the delivery of mortgage loans. This, because according to Cepeda, on this issue there is an “unpleasant novelty” which is the high default rate, which is already 12%. “It is an absurd rate in relation to the industry,” he says. In this sense, it says that a review of the policies will be requested so that these credits have more rigorous placement rules.

Cepeda explained that he has carried out a review and found errors of concept to calculate the monthly payment installment. The official also commented that normally you should take into account the net income, and not the gross. In addition, it must be established, as in any other bank, that a certain percentage of said income that can be used for housing. It also considers that the bank You must be more diligent on the subject of customer history, since a lack of analysis has been detected. In any case, he assured that it cannot be ruled out that there has been inappropriate handling, which is being investigated.

Another important issue for the bank is that of trusts. Francisco Cepeda said that at the moment there are about $ 1,000 million in this segment that are practically paralyzed. And yet, they have not yet been given any formalities. He explained that on this issue there has even already been an observation from the Superintendency of Banks in order to start generating concrete plans to reactivate them.